Berjaya Foods-Will it Reward Shareholders?

Food for Thought

Yesterday, the counter could not cling to its gains and slid more than 5.7%. From RM1.38, Berjaya Foods (BJF) lost 8 sen to RM1.30, touching a low of RM1.29. Fortunately, there was no volume. Like an occasional rain in the desert, it will stay ever illusive on low volume trading; this time about 1,450 lots of 100 units each.

I think this is symptomatic of a tightly held counter by possibly a major shareholder or by reluctant minority shareholders who are not desperate to sell. That it has gone down may be indicative of some day traders disposing  to take advantage of the declining trend to get back on the bandwagon at a much lower price. Simple economics and might just work if selling persists.

At 65 sen for a right share,  this current price will fetch a clean 100% profit. So, a good strategy is to dispose a 1,000 unit lot  when it goes ex, collect the  800 rights at RM520, collect the warrants for free and subscribe for excess shares; hopefully they give you.

Today is the last day for the tax exempt dividend of 2.5 sen. So, any purchase price is effectively 2.5 sen cheaper. Fro instance, if you buy at RM1.30; it means it is a purchase of  RM1.275 which can offset a big portion of your overhead charges.

My guesstimate, they will still hold it above RM1.00 until it goes ex, giving you a profit berth of RM0.35 sen. This is a very conservative stand.

Happy speculating but caveat emptor!


PS: BJF declined by another 5 sen today to RM1.25 before ex-dividend day tomorrow.